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The Alchemy of Investment

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by

Raghava Neti

on 9 September 2018

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Transcript of The Alchemy of Investment

SAN FRANCISCO
COMPANY
WEAK
MODERN PORTFOLIO THEORY
HIGHER RETURNS
LOWER RISK
RETURNS
VOLATILITY
Business Model
LONG TERM INVESTMENT HORIZON
ECONOMY
Undervalued
SOURCE: MINISTRY OF FINANCE OF RESPECTIVE COUNTRIES
Headwinds and Tailwinds
Inter-Industry Comparison
Valuation
Management
%
Case Study
242,000
units sold


PORTFOLIO EVALUATION

COMPREHENSION OF THE MARKET
LONG TERM INVESTMENT HORIZON
HIGH RISK APPETITE
AGE
WEALTH
LIABILITIES
JACK ABRAHAM
SHARPE RATIO
LOW FINANCIAL BURDEN
CONCLUSION
30 Ranks
100*
EASE
OF
DOING BUSINESS
QUARTERLY
REVIEW
TACTICAL ASSET ALLOCATION
HIGHER RETURN AVENUES
LESS GAINFUL VENTURES
INDIAN
CYCLICAL
SECTORS
17 YEARS
UNSTOPPABLE
and
JD POWER
SOURCE: WORLD BANK
23.17
13.07
13
12
6.37
130
1
253,759 units
233,915 units
34
40
6.10
0.97
-0.90
0.96
-0.41
Price to Earnings Ratio
INVESTMENT WORLD
6.48
3.2
1.75
1.2
0.8
Price to Book Value Ratio
NIFTY AUTO
Appreciation since 2016
PORTFOLIO RECOMMENDATION
19
148
JACK
STOCK
and his bean

VIGIL MECHANISM
COST CUTTING APPROACH
Investment with a Conscience
Right
Right
is
Wrong
is
Wrong
SOURCE: SOCIETY OF INDIAN AUTOMOBILE MANUFACTURERS
CARS PER THOUSAND - 2017
Price to Earnings Growth Ratio
GANDHI JI'S 3 POVERBIAL MONKEYS

INDIA
UK
CHINA
USA
INDIA
CHINA
USA
UK
USA
CHINA
INDIA
UK

Source: Annual Reports of Respective Companies
SOURCE: IMF
INNOVATION
RURAL PENETRATION
CUSTOMER SATISFACTION
WEAK FOOTHOLD IN LUXURY CAR SEGMENT
CHANGE IN DEMAND TRENDS
INTRODUCTION OF ELECTRIC VEHICLES
INCREASING DEMAND IN FOREIGN MARKETS
ENTRY OF CHINA IN INDIAN MARKETS
INCREASING FUEL PRICES
SOURCE: WORLD BANK
LONG TERM INVESTMENT HORIZON

EXPECTED RETURNS
VOLATILITY

OUR ENDEAVOUR
Source: Annual Reports of Respective Companies
EFFICIENT FRONTIER
RISK INDIFFERENCE CURVE
OPTIMAL PORTFOLIO
0.05
0.1
0.15
0.2
0.25
0.24
0.3
0.28
0.26
0.32
0.34
0.36
0.38
0.4
FEASIBLE SET
Source: Quarter Reports of Mahindra &Mahindra and Maruti Suzuki India Ltd.
CONSUMER DISCRETIONARY SECTOR
PESSIMISM
SKEPTICISM
OPTIMISM
EUPHORIA
7.2 %
PORTFOLIO REVISION
1.CLIENT ANALYSIS
2.TOP DOWN
3.ETHICS
4.ALCHE.PY
5.PORTFOLIO REVISION
6.PORTFOLIO EVALUATION
7.ABOUT ALCHEMY
1.CLIENT ANALYSIS
2.TOP DOWN
3.ETHICS
4.ALCHE.PY
5.PORTFOLIO REVISION
6.PORTFOLIO EVALUATION
7.ABOUT ALCHEMY
CLIENT ANALYSIS
TOP DOWN
ETHICS
ALCHE.PY
PORTFOLIO REVISION
PORTFOLIO EVALUATION
ABOUT ALCHEMY
1.CLIENT ANALYSIS
2.TOP DOWN
3.ETHICS
4.ALCHE.PY
5.PORTFOLIO REVISION
6.PORTFOLIO EVALUATION
7.ABOUT ALCHEMY
1.CLIENT ANALYSIS
2.TOP DOWN
3.ETHICS
4.ALCHE.PY
5.PORTFOLIO REVISION
6.PORTFOLIO EVALUATION
7.ABOUT ALCHEMY
CLIENT ANALYSIS
TOP DOWN
ETHICS
ALCHE.PY
PORTFOLIO REVISION
PORTFOLIO EVALUATION
ABOUT ALCHEMY
CLIENT ANALYSIS
TOP DOWN
ETHICS
ALCHE.PY
PORTFOLIO REVISION
PORTFOLIO EVALUATION
ABOUT ALCHEMY
CLIENT ANALYSIS
TOP DOWN
ETHICS
ALCHE.PY
PORTFOLIO REVISION
PORTFOLIO EVALUATION
ABOUT ALCHEMY
CLIENT ANALYSIS
TOP DOWN
ETHICS
ALCHE.PY
PORTFOLIO REVISION
PORTFOLIO EVALUATION
ABOUT ALCHEMY
CLIENT ANALYSIS
TOP DOWN
ETHICS
ALCHE.PY
PORTFOLIO REVISION
PORTFOLIO EVALUATION
ABOUT ALCHEMY
CLIENT ANALYSIS
TOP DOWN
ETHICS
ALCHE.PY
PORTFOLIO REVISION
PORTFOLIO EVALUATION
ABOUT ALCHEMY
CLIENT ANALYSIS
TOP DOWN
ETHICS
ALCHE.PY
PORTFOLIO REVISION
PORTFOLIO EVALUATION
ABOUT ALCHEMY
CLIENT ANALYSIS
TOP DOWN
ETHICS
ALCHE.PY
PORTFOLIO REVISION
PORTFOLIO EVALUATION
ABOUT ALCHEMY
CLIENT ANALYSIS
TOP DOWN
ETHICS
ALCHE.PY
PORTFOLIO REVISION
PORTFOLIO EVALUATION
ABOUT ALCHEMY
CLIENT ANALYSIS
TOP DOWN
ETHICS
ALCHE.PY
PORTFOLIO REVISION
PORTFOLIO EVALUATION
ABOUT ALCHEMY
CLIENT ANALYSIS
TOP DOWN
ETHICS
ALCHE.PY
PORTFOLIO REVISION
PORTFOLIO EVALUATION
ABOUT ALCHEMY
CLIENT ANALYSIS
TOP DOWN
ETHICS
ALCHE.PY
PORTFOLIO REVISION
PORTFOLIO EVALUATION
ABOUT ALCHEMY
CLIENT ANALYSIS
TOP DOWN
ETHICS
ALCHE.PY
PORTFOLIO REVISION
PORTFOLIO EVALUATION
ABOUT ALCHEMY
VOLATILITY (STD. DEVIATION)
CLIENT ANALYSIS
TOP DOWN
ETHICS
ALCHE.PY
PORTFOLIO REVISION
PORTFOLIO EVALUATION
ABOUT ALCHEMY
3.5%

2.87
2.27
1.01
0.78
SOURCE: WORLD BANK
U.S.A.
U.K.
INDIA
CHINA

WEAK
WEAK
STRONG
STRONG
WEAK

Debt To GDP
Fiscal Deficit To GDP
MONETARY STATISTICS

Interest Rates
Exchange Rates
Current Account
INVESTOR'S
CONFIDENCE
FDI To GDP
FPI To GDP
Market Cap To GDP
ECONOMIC POTENTIAL
Real GDP Growth
Demographic Dividend
Corporate Earnings

ALCHEMACRO
0.42
0.24
0.3
0.28
0.26
0.32
0.34
0.36
0.38
0.4
0.42
0.05
0.1
0.15
0.2
0.25
WORLD GDP
OVER THE LAST
2000 YRS
FISCAL CONSIDERATIONS
Investment Destinations
HIGHEST SALES IN UV SEGMENT (2017-18)

INDIA
U.S.A.
U.K.

CERTIFICATION
SOURCE: SOCIETY OF INDIAN AUTOMOBILE MANUFACTURERS
LOW FINANCIAL BURDEN
SAN FRANCISCO
NOT OPTIMAL

1.CLIENT ANALYSIS
2.TOP DOWN
3.ETHICS
4.ALCHE.PY
5.PORTFOLIO REVISION
6.PORTFOLIO EVALUATION
7.ABOUT ALCHEMY
CLIENT ANALYSIS
TOP DOWN
ETHICS
ALCHE.PY
PORTFOLIO REVISION
PORTFOLIO EVALUATION
ABOUT ALCHEMY
1
500
1000
1500
2017
1 TRILLION
10 TRILLION
100 TRILLION
SOURCE: WORLD GDP - OUR WORLD IN DATA WORLD BANK AND MADDISON (2017)
GDP
YEARS
EFFICIENT FRONTIER
CLIENT ANALYSIS
TOP DOWN
ETHICS
ALCHE.PY
PORTFOLIO REVISION
PORTFOLIO EVALUATION
ABOUT ALCHEMY
E
E
E
$
MARUTI SUZUKI INDIA LTD.
Full transcript